Despite President Trump's promise to block AT&T's purchase of Time Warner Inc., the government's review of the merger has "reached an advanced stage" The Wall Street Journalreported yesterday.

"The deal’s regulatory review has hit a late-stage point where AT&T lawyers are discussing merger conditions with the Justice Department," the report said, quoting people close to the situation. If the Justice Department concludes that any potential harms from the merger can be offset by conditions, then it would not sue to block the deal.

"Among the topics raised in the government’s review is ensuring that AT&T doesn’t discriminate or treat channels that compete with Time Warner's content less favorably, the people close to the situation said," the Journal wrote. "For example, the government could prevent AT&T from favoring HBO over other premium-TV brands in its marketing and pricing, the people said."

Further Reading

Merger discussions are also focusing on AT&T's control of customer data to target advertising, with antitrust officials considering whether AT&T should have to make that data "available at a reasonable cost to rivals," the report said.

Senate Democrats urged the Trump administration to block the merger, saying that the combined AT&T/Time Warner control over both distribution and content "will lead to higher prices, fewer choices, and poorer quality services for Americans."

Trump's campaign promise

When he was campaigning for president, Trump said that AT&T/Time Warner is "a deal we will not approve in my administration because it's too much concentration of power in the hands of too few." Last month, there were reports that White House officials have discussed using the merger review as "leverage" against CNN, whose news coverage has been frequently criticized by Trump. But Trump hasn't repeated his promise to block the merger since becoming president.

One complication that could cause delay of the merger's approval is that the Senate has not yet confirmed Trump's nominee to run the DOJ's antitrust division. The nominee, former DOJ antitrust lawyer Makan Delrahim, has said the AT&T/Time Warner deal does not pose a "major antitrust problem."

Delrahim could be confirmed by the Senate as early as September. But antitrust officials might not even feel the need to wait that long to approve the merger, as the discussions have proceeded to their current advanced stage despite the antitrust division's top spot sitting vacant. "The Justice Department can still make antitrust decisions without Mr. Delrahim, though a political appointee usually has the final say on whether to challenge a major transaction," the Journal report said.

The Federal Communications Commission can stop mergers that don't benefit consumers, but the FCC decided not to review AT&T's purchase of Time Warner.